Does adversity work to one’s advantage? Shakespeare saw its sweet uses. American-Israeli journalist Saul Singer, co-author of Start-Up Nation: The Story of Israel’s Economic Miracle, a 2009 bestseller, is another firm believer. In a freewheeling chat with Patralekha Chatterjee while on a visit to New Delhi last week, Jerusalem-based Singer noted that both countries tellingly illustrate how obstacles can be turned into opportunities. Does Israel, with its adversity-driven culture, a combination of chutzpah and innovative and entrepreneurial intensity, offer some lessons to India?
Excerpts:

Q: Israel has an impressively innovative and entrepreneurial hi-tech culture. But can we apply lessons about innovation from a small nation with barely eight million people in a country of India’s size and diversity?
A: Israel, though a small country, has the largest concentration of hi-tech start-ups anywhere in the world outside of Silicon Valley. Large companies like Intel, Google, Microsoft, IBM — the main technology companies in the world — have their R&D centres in Israel. Many of the chips that are in the computers you use were either designed or built, or both, in Israel. But I think the more significant reason for Israel’s importance is that every country today has to tackle very big problems — water, energy, food, environment, and so on. We can enable the world to stay ahead to some degree in some of these problems through technology.
Israel is very strong in agro-tech and other areas. Lessons from Israel may not be relevant from the point of view of copying what Israel has done. But it is very relevant from the point of view of working together, pooling the strengths of both countries. There is a fundamental divide between large companies and start-ups. Start-ups are very good at innovation. Large companies are very good at scaling up. Big companies find it difficult to come up with radically new ideas because of their big bureaucracies. Apple is the exception. It is a big company that can innovate.
Start-ups can be used to innovate. That is what American companies have done in Israel. The rest of the world can do so too. A country like India with big problems needs start-ups.
Q: How, and in which areas, can the India-Israel economic collaboration work?
A: There are two basic models. One is big company-to-start-up — come to Israel, look for start-ups, buy them out. Then there is a new model — that is, start-up-to-start-up. An Indian start-up will bring incredible knowledge about the Indian market, great talent in engineering and so on. The Israeli side has better access to the Western financial ecosystem — finance and so on. This can be used in agro-tech, biotech. Netafim (an Israeli company which has pioneered and developed drip irrigation) is selling its products in India, and is also partnering other companies. India and Israel can collaborate in agro-tech, water management, appropriate technology for rural areas, and then there other emerging areas like renewable energy.

Q: There is also the debate about the role of the state in both countries. Your comments.
A: Between 1950 and 1970, Israel had a very top-down, government-dominated economy. There was little free-market orientation. At that time, people doing business were shunned — similar to how Nehruvian socialists felt towards capitalism. But Israel grew very quickly during this period because we were starting from a low base. We were also lucky that our leaders were not corrupt. That kind of economy hit a wall after a point. This is what happened to you in the 1990s, when you had a financial crisis. In Israel’s case, it led to the bottom-up economy, but even with the bottom-up economy the government played a critical role by jumpstarting the hi-tech scene by working out a three-way partnership to start a venture capital system.
There was money from the government, money from Israeli funds and money from American funds. That worked very well.

Q: In your book, you make a strong case for viewing adversity as a potential advantage. India is known the world over for its prowess in information technology, but some people say if we did not have such bad roads, we many not have embraced IT with such passion in the early days. Israel faces very different circumstances, but is the talent for turning adversity into advantage something that is common between the two countries?
A: Israel started off with chips, computers, mobile technology — things that are highly technological but things that are inside other products. Not the consumer products themselves. That may have been partly because Israel has been cut off from markets. Geographically, it is not sitting in the middle of a market like the United States or Europe. It is cut off from regional markets because of boycotts. This goes into the heart of innovation. Most people think of innovation as ideas: how to turn ideas into start-ups. But ideas alone do not lead to start-ups.
There are two other factors — drive, determination and the culture of taking risks. Israelis have got both by living in situations of adversity. India too is coping with adversity all the time.